“We’re looking for something a bit more interesting than just putting money into the markets.”
Over the years, it’s a comment that’s cropped up a few times.
And I understand why some people may express this.
If you’re going to take advice, pay fees, and commit your money for the long term, it’s natural to assume there should be something a bit more… involved. Something you couldn’t just do yourself.
Something different.
Some ‘alpha’.
But it’s not really how this works.
The expectation
There’s a fairly common belief that the value of a financial adviser comes from access.
Access to better investments, opportunities others don’t see and something a bit more sophisticated than the “standard” approach.
And to be fair, the asset management industry hasn’t done much to challenge that idea.
In fact, quite a lot of it leans into it.
The reality
In reality, most good financial outcomes don’t come from finding something different.
They tend to come from doing fairly straightforward things… consistently… over a long period of time.
Which, admittedly, isn’t a particularly exciting message.
What “vanilla” actually means
When people refer to “vanilla” investing, they’re usually talking about:
- Broad, global exposure
- Diversification across markets
- Long-term, consistent investing
Nothing particularly clever. Nothing exclusive.
But that doesn’t make it basic.
It’s deliberate.
Over time, markets tend to reward patience and discipline far more than cleverness.
The slightly uncomfortable bit
This is where it often becomes a bit counterintuitive.
The value of advice isn’t usually what an adviser offers. It’s often in what they stop people from doing.
“The dominant determinant of long-term real-life investment returns is the behaviour of the investor him or herself”
Because most of the damage we see over time doesn’t come from a lack of opportunity.
It comes from:
- chasing ideas
- overcomplicating things
- taking risks that don’t need to be taken
That’s usually where things start to unravel.
Most people don’t need anything more complicated than this.
The “non-vanilla” world
Over the years, we’ve seen all sorts.
- Property loan notes – student accommodation, nursing homes.
- Structured
- Private credit- there are some early warning signs on this right now
- Investments in agricultural assets… I’ve seen it all from pigs, the hydroponics to oud oil
I wish that last one was a joke.
And to be fair, many of these are presented well.
They’re often backed by compelling stories. They feel different.
And they promise something that sounds more interesting than simply “investing in markets”.
Sometimes they work.
Many don’t.
And you rarely hear about the ones that don’t.
Why people get drawn to them
There’s a behavioural side to this.
People want to feel like they’re doing something a bit smarter. A bit more considered.
There’s also a sense that if something is:
- more complex
- less widely available
- or described as “exclusive”
…it must be better.
Particularly for people earning well, or living internationally, these opportunities tend to appear more often.
Which makes them harder to ignore.
What actually makes the difference
The slightly less exciting truth is that you don’t need extraordinary investments to achieve a very good outcome.
For most people, the difference is made by:
- staying invested
- being properly diversified
- giving things enough time
- and avoiding the bigger mistakes along the way
That tends to do most of the heavy lifting.
The role of advice
This is where the role of an adviser is often misunderstood.
It’s not necessarily about finding something you haven’t heard of.
It’s about filtering what you have.
Sense-checking decisions, providing context and, occasionally, saying something fairly simple:
“Don’t do that.”
It’s not always the most exciting advice.
But it’s often the most valuable.
A quick sense-check
If the main thing an adviser is offering is access to “non-vanilla” investments, it’s probably worth pausing for a moment and asking why.
That doesn’t automatically make it wrong.
But it does change the nature of the conversation.
A balanced view
That said, not all non-vanilla investments are bad.
Some people choose to allocate a small portion of their portfolio to things they find interesting.
Some of those investments perform well.
The issue is when your financial plan starts to depend on them.
That’s where things tend to become more fragile.
Final thought
Most good financial outcomes don’t come from doing something particularly clever.
They come from doing the basics well, sticking with them, and avoiding the bigger mistakes along the way.
Which isn’t always the most compelling message.
But it tends to be the one that works.
If you ever find yourself being pulled towards something a bit more “interesting”, it’s probably worth pausing and asking why. And if you want a second view, we’re always here.
📩 Email us anytime: info@charltonhousewm.com
📞 UK: +44 (0) 208 0044900
📞 Hong Kong: +852 39039004
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